The Government has decided to raise no objections under foreign investment policy to a proposal by Tyndall Australia Ltd (Tyndall), and its wholly owned subsidiaries, to acquire a portfolio interest in John Fairfax Holdings Ltd (Fairfax) of up to 10 per cent.
In approving this proposal, the Government has taken into account the fact that Tyndall, in the main, would be holding this interest in Fairfax, as fund manager, for predominantly Australian client investors.
Foreign investment approval for Tyndall is conditional on Tyndall limiting its vote in Fairfax to less than 5 per cent. The limit on Tyndalls voting power is consistent with Tyndalls investment being a portfolio investment.
This conditional approval for Tyndalls investment in Fairfax is similar to an earlier conditional approval for Bankers Trust Australia Ltd (BTA) by which BTA had to limit its voting in Fairfax to less than 5 per cent. A press release was issued on this matter on 8 August 1996.
Under foreign investment policy, portfolio investments in Fairfax of less than 5 per cent by foreign interests do not require prior approval. Portfolio investments of 5 per cent or more require prior approval. Tyndalls portfolio investment in Fairfax has the same voting power as other foreign portfolio investors with the maximum investment before foreign investment approval is needed.
The foreign investment policy in relation to direct investments continues to apply; that is, the maximum permitted foreign interest direct investment involvement in national and metropolitan newspapers (including Fairfax) by a single shareholder is 25 per cent and unrelated foreign interests are allowed to have non-portfolio shareholdings of up to 5 per cent (ie, a maximum of 30 per cent).